Explain the Limitations of International Marketing


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LIMITATIONS OF INTERNATIONAL MARKETING

 

1. Unequal sharing of benefits:

The benefits of international marketing are not shared in a fair manner among the

participating  countries.  Rich  and  developed  countries  get  more  benefits  at  the  cost  of  poor  and developing countries.

2. Restrictions on International Marketing:

International marketing will offer all benefits only when free trade is allowed by all

countries. However, the actual position is all together different. Trade restrictions (tariff and non‐tariff) are imposed by all countries (developed and developing) on free movement of goods. This restricts the growth of international trade and actual benefits available to participating countries are limited. Efforts to remove various restrictions by WTO and other international trade organizations are not effective.

3. Adverse effects of trade blocs on International Marketing:

Along with trade barriers, trade blocs exist among the countries of the world. EU, LAFTA,

ASEAN are some active trade blocs. They encourage trade among the members of the group but put

artificial restrictions on the trading activities with non‐members. As a result, the growth of international marketing is restricted. Similarly, free trade among nations is not allowed. In addition, countries which have not joined such trade blocs suffer in regards to their exports and imports.

4. Domination of MNCs and developed countries on International Marketing:

MNCs from rich and developed countries dominate international trade since long. Their

operations  are  for  profit  maximizations.  Poor  and  developing  countries  suffer  due  to  virtual monopolistic position of MNCs in international marketing. These corporations sell their products in many developing countries as per the terms and condition which are profitable to them. This leads to exploitation of poor and developing countries also dominate international marketing.

 

5. Existence of severe competition in international marketing:

One  limitation  of  present  day  international  marketing  is  the  existence  of  stiff

competition among participating countries and companies from such countries. Unfortunately, this competition is between unequal competitors. It is between rich and poor or developed and developing countries. Developing countries lack advance technology, skilled labour, infrastructure facilities and so on. As a result,  they  find it difficult to compete with the developed countries which use updated technology in the production activities. Many poor countries have to sell their raw materials and other resources at a low price to rich countries.

 

 

 


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